Agreeing on business value

We talk a lot about "maximizing business value". We ask business people and product managers to prioritise by estimating the business value of user stories. But what exactly do we mean by business value?

18.
Building a Business Value Model
• Work in groups per table
• Use Post-Its to make model easy to change
• When you have a question or an issue
– Write it on a pink Post-It
– Continue working
– Resolve issues and questions when we come
round to your table

26.
Leading and Lagging indicators
• Most measures can only be measured late,
after customer use
• These are called “Lagging indicators”
• We want feedback sooner
• We find measures that we can have sooner
and that (we think) predict success with the
real goals: “Leading indicators”
• We can use leading indicators during the
project

27.
Building a Business Value Model
(3)
1. Identify goals that can only be measured late
2. Identify goals that can be measured early and
are good predictors
3. Add them as Post-Its

31.
Diagram of Effects
• We’re looking at complex systems
• Changing one variable will affect another
• A “Diagram of effects” shows how we think
these measures affect one another

32.
Why should we do
Business Value Modelling?
Value Delivered
Focus Alignment
Clear Definition
of Value
Common
Understanding
Business Value
Modelling
Motivation

33.
Building a Business Value Model
(4)
1. Identify and explain relationships between
lagging indicators
2. Identify and explain relationships between
leading indicators
3. Identify and explain relationships between
leading and lagging indicators
4. Add any missing measures that are needed
to explain the system

35.
Building a Business Value Model
(4)
1. Identify and explain relationships between
lagging indicators
2. Identify and explain relationships between
leading indicators
3. Identify and explain relationships between
leading and lagging indicators
4. Add any missing measures that are needed
to explain the system
Time’s up!
5 min

39.
A Business Value Model
is a Hypothesis
• The Business Value Model is one of many models
the team builds
• No model is perfect, some are useful
• Our model is a hypothesis, what we think will
happen
• We re-evaluate and improve the model regularly
based on feedback
• It’s not a “zombie” business case (one that comes
back to haunt you)
• We won’t be punished if we get it wrong

43.
The Mobile Phone Company
Situation
• Already spent 2 months on
analysis
• Identified 60 features
• “We need web-based self-
service”
• Reluctantly agreed to do a
few days of analysis
Outcome
• Only 10 out of those 60
features delivered value
• Identified 4 new features
crucial to the success of the
project
• 25% of the value could be
delivered within one
month; no need for a web
application

44.
A Commercial Bank
Situation
• Mythical belief in the value
of the project
• Project attempted 3 times
previously
• Estimated development
cost continued to go up
during analysis
• Unclear project goals
• Competing stakeholders
Outcome
• Determined the validity of
the existing business case of
the project
• Reduced the scope by 40%
making it eligible for the
existing program

45.
The Transport Company
Before
• A new team on their first Agile
project
• Two days of business analysis
with the whole team
• “Aren’t we wasting too much
time analysing?”
• “Why are the developers
here?”
• “When can we start coding?”
After
• In production 3 months
earlier than predicted
• “I can’t believe we already
released. Normally we’d still
be doing analysis.”
• Developers came up with a
new use for existing data,
with large financial and
ecological benefits

46.
Exercise 5
Create a poster to explain the
Business Value Modelling tool

47.
Session Acceptance Tests
 I can build a simple Business Value Model
 I can explain the value of building a Business
Value Model
 I want to learn more about this topic